Tuesday, 9 November 2010

UK Nudges

I've been pretty critical of Sunstein and Thaler's "Nudge" programme of libertarian paternalism. The emphasis seems to be pretty heavily on the latter. In theory, we could imagine replacing a lot of existing paternalistic regulations with nudge-style interventions that would reduce the total amount of coercion; however, it's seemed rather more likely that nudges would be added on to the existing set of regulations to increase the scope of paternalism rather than to make existing paternalism less onerous. Richard Thaler's objected that this isn't the point of libertarian paternalism:

The point of libertarian paternalism is precisely to devise policies that help but don’t intrude. I don’t like most pure paternalism either. But I really feel that the best way to fend off pure paternalism is by utilizing nudges instead of shoves, and by insisting that we keep the nudges as gentle as possible. Can any true libertarian really disagree?

The application of behavioural economics does not imply a paradigm shift in policy-making. It certainly does not mean giving up on conventional policy tools such as regulation, price signals and better information. Sophisticated behavioural programmes to reduce smoking or excess drinking don‟t imply giving up on taxes on cigarettes and alcohol. Similarly, programmes to persuade us to eat five portions of fruits or vegetables a day mean still have to address practical barriers such as how the lack of supply of fresh food in poorer neighbourhoods.

Nudges are complements to standard paternalistic regulation, not substitutes for it. The total amount of paternalism increases.

The document above-linked makes few policy recommendations other than that nudge approaches be considered as part of the policymaker's toolkit. But here are some of their general suggestions.

Use social norms to convey examples of desired behaviours: "Most people do X" as information campaigns

If taxes aren't normally incorporated into the sticker price on the shelf, start adding them into the sticker price of bad things so they'll appear to be pricier (alcohol).

Because some may not approve of government pushing folks towards desired behaviours, use public campaigns with messengers "that are not seen as agents of the state": peer to peer programmes, non-government organizations

Encourage "opt out" contributions as part of prices to help fund public projects. Examples given are Washington State's default $5 addition to drivers' licence fees for state parks. "This has implications for policy-makers either concerned with raising revenues in a non-compulsory manner, or with more nuanced ways of regulating and adjusting for market failures."

Priming folks with songs with "pro-social" lyrics increases altruistic behaviour, but "more research evidence is needed before such interventions could be recommended". I'd hate to guess where they'd wind up going with this. Reduced spectrum licence fees for radio stations playing a quota of pro-social music?

Social marketing drawing on affect to encourage blood donation and community volunteering

Bottle deposit schemes use loss aversion to encourage recycling; make them mandatory.

Train kids in schools to provide health information to parents and grandparents.

Evidence that interventions affecting individual behaviour, like workplace smoking bans, may indirectly affect their peer group's behaviour and consequently "may increase the legitimacy of policies that are used to target other unhealthy behaviours."

"Where confusion exists in pricing structures, it may be necessary to require companies to present their prices in structured formats that allow consumers to make the choice that is best for them."

They note, without recommendation, that among the factors that prime folks for excessive drinking are container size. Presumably this would lead to measures making the half-pint the standard default unit rather than the pint.

Mood can affect choices; decisions made in "hot" states may be regretted, so "it may be useful to have a formal 'cooling off' period that allows us to come back and reconsider our decision at a later date"; insurance and personal loans are given as example.

Mechanisms requiring casinos, including those online operating out of the UK, to exclude problem gamblers who've signed onto self-exclusion agreements. (recall that Julia Gillard has done this one worse in Australia)

Default opt-out private pension contributions.

They note that getting public approval for some of their proposals might be difficult; they recommend deliberative forums where citizen juries get to hear evidence and discuss issues, with results of those forums helping to build legitimacy for proposed policies. I wonder whether they've here hoping to exploit Cass Sunstein's work finding a strong severity shift in jury deliberations.

If the event has such legitimacy, then it could be seen that some personal responsibility has been preserved because people have been able to make a considered and informed decision to allow government to change their behaviour.

Nice. Libertarian paternalism has shifted from opt-out to "if we have a forum, it's ok".

As example of judging whether an intervention might be controversial, they suggest a potential policy of "acceptable eating contracts", where the obese would sign contracts mandating certain eating behaviours; they suggest this would be less controversial than policies using priming to achieve similar ends. The Acceptable Behaviour Contracts with which they're compared are given as alternative to prosecution for low-level offending; I'm not sure whether Acceptable Eating Contracts would be entirely voluntary or "nudge" voluntary, where the NHS doctor says you'll be sent to fat camp in the alternative (but it's still your choice).

I wonder how long it'll be until the Ludovico Technique is recommended as Nudge-based policy as alternative to worse things for folks whose preferences don't conform to those of the nudgers.